How to Start a Medical Marijuana Dispensary

In most U.S. states, it is legal to use cannabis for medicinal purposes. This has led to a lot of growth in the marijuana dispensary business offering a range of cannabis strains required to fulfill patients’ prescriptions.

Opening your dispensary is a great way of tapping into this growing market which promises handsome returns. But, unlike many other businesses, you can’t just randomly open a medical cannabis dispensary. There are laws and regulations you need to be aware of in addition to the financial obligations you should expect. We’ve done the research, so read on to see how to start a medical marijuana dispensary.

8 Tips for Starting a Medical Marijuana Dispensary

1. Check Your Eligibility

Starting a medical cannabis dispensary has a different process than starting a regular business. Cannabis is listed as a Schedule 1 Narcotic, so many states require a background check before the license to start a dispensary is granted. The background check will also encompass any employees employed in the dispensary. In many cases, people with a felony background are not allowed to operate a dispensary, so keep this in mind if you are interested in the dispensary business.

2. Know the Laws

Cannabis can be used for medicinal purposes in all U.S. states except for Idaho, Kansas, Nebraska, North Carolina, South Carolina, and Wyoming. However, even in the states where it is permitted, the sale of cannabis still has a lot of stringent rules around it. Before you put money into the business, you need to know the laws around opening a dispensary in your exact location. This is a good resource to see an overview of the laws on medical marijuana in your state.

The easiest way to know all the laws around cannabis selling is by talking to an attorney well-versed in your state’s medical cannabis laws. A conversation with an expert will give you more concrete guidance before you put thousands of dollars down on a business.

3. Create a Brand

To ensure the success of your dispensary, you will need to differentiate what you offer from what other dispensaries offer. Think long and hard about the goal for your medical dispensary. Do you want to help people access alternative methods of treatment for life-threatening conditions? Or do you want to help people suffering from chronic pain to alleviate their pain? Or maybe your goal is to help people with anxiety or other debilitating conditions live as normal a life as possible? You don’t have to restrict yourself to just one goal, but you should be able to explain the purpose of your business in just a few words. Knowing the goal for your dispensary will make it easy for you to attract investors and even clients when the time comes.

4. Plan Your Finances

When you first open your dispensary, chances are you will need to finance it for a while before you make profits. Experts estimate that upwards of $250,000 is required to get the licenses, location, insurance, and staff for your dispensary. You can raise this amount by bootstrapping, so get in touch with those long-lost friends and relatives. If you have a job or other investments, you can channel the profits and savings into the capital for your business. A lot of people are interested in investing in cannabis businesses, so do your research on local investors and prepare a killer pitch that will have them pouring money on your lap. You can also look into loan options your bank can offer you, although most banks are yet to catch up to the green craze.

5. Secure a Location

You will need a secure storefront to operate your dispensary from, so start looking early. If you’re planning to rent, talk to landlords in your area, ensuring you find one who understands the need for a dispensary and so won’t frustrate you in the future. Several laws regarding the location of a dispensary apply. For example, regulations often require that a cannabis dispensary is more than 1000 feet away from schools, churches, and residential areas. Laws also require the landlord for the location you choose to have a Certificate of Occupancy that permits the running of a cannabis dispensary. Talking to local realtors and attorneys will ensure you get the right location that will suit your business for a few years.

6. Write a Business Plan

One of the requirements for starting a medical cannabis dispensary is a well-written business plan. The plan will have to provide a thorough breakdown of costs, including those for licenses and permits, the location of your business, how you plan to source cannabis for the dispensary, your marketing plan, and what products you will sell (such as cannabis smoking accessories, hemp/CBD, edibles, and so on). The utility of a business plan goes beyond getting you permits and funding. A good plan will also provide you with direction and motivation when you meet bumps on the road.

7. Build Your Team

The success of your medical dispensary relies heavily on the people that work with and for you. You will need a physician, sales staff, a security team, and suppliers to start operations, so do your research in advance to see who will make the perfect fit.

Conduct interviews for subordinate staff to ensure they’re trustworthy and reliable. Visit growers’ farms to ensure they maintain high qualities of produce. Enlist the help of expert marketers so your dispensary is well-known even before it starts operating. Put a lawyer on payroll so they can help you navigate the tricky laws surrounding cannabis.

Getting the right team in place will ensure you hit the ground running and have people who believe in your vision, which will be invaluable when the tough times come.

8. Get Licenses

As with all businesses, you can’t start selling cannabis without the required licenses. The process of getting them may be difficult, but an attorney should be able to help you in a big way. Comply with all the regulations needed, including submitting the necessary documentation and availing yourself, your location, and your staff for inspections. Do not lie or try to cut corners. A medical cannabis dispensary is a big investment, so do not take risks that will cause the authorities to close it down.


Starting a medical cannabis dispensary might be difficult, but it is not impossible. Thousands of people have managed to do it, so don’t get discouraged by the long processes and bumps you will meet along the road. If you follow the 8 tips for starting a medical marijuana dispensary outlined above, you will be able to own your cannabis dispensary in no time.

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